http://www.indymedia.org/front.php3?
article_id=128203&group=webcast ----------!!!!!!!----------- Also REALLY
good: http://www.phillyimc.org/alternatives/ --------!!!!!!!--------- Dollarization
threatens Afghan national identity (english) by The Frontier Post 2:46am
Sat Feb 2 '02 (Modified on 3:36am Sun Feb 3 '02) 'By proposing such ideas,
the IMF is trying to weaken the cultural and national identity of Afghanistan.'
Dollarization threatens Afghan national identity The Frontier Post - Updated
on 2/2/2002 11:52:31 AM KABUL (Agencies): A delegation from the International
Monetary Fund (IMF) and the World Bank currently in Afghanistan said on
Tuesday that it would make sense for the country to switch to the U.S.
dollar.I personally see more benefits than negative effects, IMF fiscal
policy expert Warren Coates told a press conference in Kabul. The governor
of the Afghan Central Bank, Abdul Qadeer Fitrat, told the same news conference
that a final decision on the Afghan currency would be made by the interim
administration in the near future. The IMF should bear in mind that introducing
the U.S. dollar as the national currency is contrary to the national and
cultural identity of the Afghan people. A political analyst said that there
is a political agenda behind this proposal, otherwise there is no justification
for it. Now, the question that remains to be answered is: Why have IMF
and World Bank experts proposed such an idea? Afghanistan is a traditional
country in Central Asia with an Eastern culture and the introduction of
the dollar to replace the national currency, the Afghani, would exacerbate
the suffering of a nation which is only now beginning the road to recovery
and reconstruction after over two decades of war. By proposing such ideas,
the IMF is trying to weaken the cultural and national identity of Afghanistan.
However, they should realize that dollarization of the economy is against
the wishes of the afghan people. Analysts say that even those countries,
which are culturally and geographically close to the U.S., have resisted
switching to the dollar. What seems clear is that the IMF and World Bank
delegation is trying to take advantage of the situation in Afghanistan.
Afghan officials should know that fiscal policies introduced. http://www.frontierpost.com.pk/
afghan.asp?id=4&date1=2/2/2002 add your own comments -------------------
tale of two currencies (english) by passeroner 8:27am Sat Feb 2 '02 Brian
Holmes on Thu, 10 Jan 2002 18:36:02 +0100 (CET) ----------- "What
would money issued directly by the people look like?" Thanks to Keith Hart,
for bringing up into the sublime public space of nettime a question that
kept springing back to my mind during the initial transition to the euro.
Namely the question, what does it mean if one currency is born exactly
when another one seems to be dying? Hart's text, a jewel of understatement,
is about many many things, including localized, cooperative exchange systems
like LETS and SELS, and also the Argentino, a proposed fiduciary script
that was supposed to be the synthesis of the various forms of chits and
promissory notes edited by the Argentine provinces as a way to replace
real money with... well, another institutional reality, one that would
only hold good within the country. Of course the idea didn't last long,
and the Argentino went the way of Argentina's last four presidents. Meanwhile,
the euro was opening up a borderless continent, in which people as far
away as the Dutch and the Greeks share the same trust that 1 = 1, i.e.
that my euro equals your euro. All these 300 million people also seem to
share, for now anyway, a similar trust that the amount of goods and services
their old money used to buy them will remain about the same as what they'll
now get exchange for their wages in euros. Just as this great moment of
collective faith was sweeping the Continent, and making it into borderless
Euroland, Argentina rather more violently created yet another new currency
­ just last Sunday when it devalued its own peso by 30% against the
US dollar. The peso, you see, had ceased to exist as an independent money
with a special faith all its own. Instead, in 1990 the Argentines under
the pastoral prayers of the IMF, and with its beneficent capital contributions,
had placed their faith in the value of the US dollar, which their peso
was to unfailingly reflect and mimic, to the point where it was really
just as good as a dollar. To the point where it _was_ a dollar. This effective
dollarization had four consequences. First, it stopped the hyperinflation
that had reached 4,000 percent in 1989. Second, it made Argentina into
a country where foreign investors could reasonably expect to double their
fortunes in a reasonably short time (five years, when you get 15% return
and there's no inflation eating it away). Third, it made it very easy and
tempting for high-income Argentines to directly convert their money into
dollars, and to put it off-shore somewhere (Switzerland isn't Euroland,
is it?), while even middle-income people wisely got dollars to put into
wool socks. Fourth, it meant that Argentina's products and labor - which
were paid for in dollars, ultimately to Argentine citizens who themselves
had to pay peso-dollars for privatized public services owned by foreign
investors - became impossibly high priced by comparison to those of other
Latin American countries who had retained their faith in their own currencies.
We could add to that: Fifth, all the above meant that to keep this ball
rolling - and to keep the dollars flowing back to the foreign investors
who had chosen to invest in wealthy Argentina instead of in the other neighboring
countries who had remained relatively poor and risky by maintaining their
faith in their own poor and risky currencies - the IMF found itself obliged
to keep pumping huge amounts of dollars into Argentina, as the country
slid into a severe recession that began, as if by coincidence, during the
1997-98 Asian-Russian-Brazilian financial crisis that everyone has since
forgotten and that fortunately had no long-term effects. Now, the effective
dollarization of the Argentine currency meant that there were no economic
borders between the holders of pesos and the holders of what Americans
call "greenbacks." But the disappearance of international borders meant,
strangely enough, the creation of internal borders. It happened like this:
as Argentina became increasingly unable to sell its products and attract
dollars in any other way than by borrowing them and paying them back out
for privatized public services (plus some more thrown in for very lucrative
corruption services), it gradually came about that a continually shrinking
portion of the Argentine population had access to the basic institutions
of modern social life, i.e. electrical, water, and telephone networks,
health and education services, road and rail transport, food and consumer
goods markets. At 40% unemployment in some provinces, you're talking about
a lot of people locked out of a lot of those basic institutions. The fact
is that the Argentine government, along with the dollar-peso, finally fell
under pressure from the streets when the citizens were excluded from access
to the monetary institution itself, that is, when the government (and the
IMF) imposed the 1,000 dollar per month limit on cash withdrawals from
banks. If I read him right, Keith Hart, in his wonderfully understated
and diplomatic way, hints that with the continuing integration of people
even further apart than the Dutch and the Greeks into one Europe and one
euro, the same kind of internal borders might spring up here. And in fact,
he doesn't say it but they already did spring up in the nineties, as the
pressure of the Maastrich convergence criteria gave rise to social exclusion.
(Remember how anguished we all were about that in the mid-nineties? Before
the New Economy solved the problem?) Now, I'm not saying that Euroland
is necessarily going to work out for the worst, and like Hart I think there
are all kinds of positive potentials there - but I was feeling a little,
shall we say "dark"? the other day, as I stood in the line at the post-office
bank (a semi-public French institution), in a relatively well-off suburb
of Paris, thinking about Keith Hart and LETS and SELS and the euro and
Argentina, and watching a policeman in a bullet-proof vest (hmmm, you didn't
used to see those vests before, did you?) ask the post office-bank worker,
"Everything OK?" while the other guy outside fingered his Uzi. Seems to
me there are 2 questions in the short run: 1: Will the Argentine "contagion"
spread? Which I think is also a way of asking, Will the Asian-Russian-Brazilian
crisis, the first fully systemic crisis of globalization, come back again
to roost, ultimately in the US itself? Mind you, the American Treasury
and the big Anglo-American ratings agencies are saying very faithfully
that contagion is unlikely... But at the same time, commentators in the
newspapers are saying "This could affect the consolidation of the FTAA!"
(i.e., the proposed North-South American free-trade zone, in answer to
borderless Euroland). And then there's question 2: What will happen if
the new Argentine government, or a sucessive government, actually does
come to terms with the IMF, on a plan to keep the devaluation from dramatically
affecting the earnings of the big American and European transnationals?
I mean, is it possible to post guys with Uzis in front of all the Argentine
supermarkets, so the hungry people don't cross the borders? But isn't that
the plan that just failed? If so, does that mean the FTAA will inevitably
fail? Alternatively, will there again be talk of a break from the IMF and
a national fiduciary currency unpegged from the world economy? Or - yet
a further flight of the imagination - will the role of the IMF and the
"new rules for the new economy" of globalization somehow be replaced with
other new rules? And if so, which ones? These are the kinds of questions
that I think Keith Hart is also raising when he talks about LETS and sbout
what money directly issued by the people would look like. And these are
also the issues that some of us were bringing up a few months ago, on the
streets outside the Summit of the Americas meeting in Quebec City, which
was supposed to institute the great, borderless FTAA. But there's no place
for Keith's utopianism at those kind of summits. And we bloody ignorant
protestors from the traveling anarchist circus don't know a thing about
economics, do we? Happy New Year then, Brian Holmes -------------- Nettime-bold
mailing list Nettime-bold@nettime.org http://amsterdam.nettime.org/ ---
poetpiet.tripod.com/lastoneforawhile.htm one more (english) by piet 8:45am
Sat Feb 2 '02 Felix Stalder writes, about trust and fiduciary systems:
"Cash solves the reputation problem elegantly, by transferring the trust
from the person to the token. Credit cards solve the problem horribly with
an incredible invasive global authenticating infrastructure which is queried
virtually every time one uses the card." This is extremely well put. Cash
shows how a specific institutional mix was required to uphold the private/public
distinction on which liberal democracy was based. To be able to transact
freely, without having to establish trust by giving any account of one's
personal history - that is, without having to drag the private laundry
out into public - required a national bank system with a near-monopoly
on the issuing of legal tender. Today, credit money - i.e. checks and cards
managed by private banks - has outstripped cash in terms of volume of circulation.
This means that fully capitalist systems of money, based on making profit
out of money itself, have outstripped the currency instituted by the state
for purposes of facilitating exchange. In my daily life, cash is only accessed
through the card, and is therefore subordinated to credit money. The "invasive
global authenticating infrastructure" goes along with it, and is one of
the powerful manipulating forces in the world today, as I tried to show
in my paper on the flexible personality. However, I also think that David
Lyon in his book _Surveillance Society_ has shown pretty well that much
of surveillance infrastructure is an attempt to recreate trust in the face
of modern international mobility and what he calls "disappearing bodies."
How to be sure of strangers' promises? It's a real problem. In the face
of the answers that society is currently offering us, it seems to me that
two little questions arise, for individuals, plus one big one, which is
collective. The first little question is, how to get out of surveilled
relations? Just to breathe a little. There, the gift economy aspects of
open source and knowledge potlatch have been extremely interesting, these
last years, as a way to open up spaces of transaction without arithmetic.
Spaces that really work, in my experience: I always want to contribute
more to networks like nettime itself, or the antiglobalization movements,
where the relations are at once very casual and in vast excess of satisfaction
over what can be obtained through authenticating systems of knowledge exchange,
like the university or official art criticism, or even voting and taking
part in party politics, for that matter. (Kermit can rake me over the coals
for this bit of political naivete, but whatever.) The second question for
individuals is how to build exchange communities of lasting, instituted
trust that actually work under conditions of modern mobility, where the
spatial embrace of the village or neighborhood or commune is not available.
Keith Hart's proposals are interesting in that regard, particularly on
the urban scale, or perhaps within certain occupational universes extending
over larger distances. I'm not sure the difficulty of translating them
to the large scale of complete impersonality, international validity and
so on, is really pertinent. I suspect the problem is finding the right
scale on which each proposal can work, then sticking more or less to it.
The same observation applies to all mutualist or "third-sector" arrangements,
where an element of solidarity is made part of a functioning exchange arrangement.
The big, collective question remains: how to trust strangers for transactions
that go beyond the risks that individuals are willing to manage for themselves?
Cash does solve the problem, but look: we have basically a world currency,
the dollar, and the kind of person who goes around with suitcases full
of them is not particularly trustworthy. We also have global networks of
credit money, but today those networks (banks, stock markets) are big factors
encouraging "turbo-capitalism" as Luttwak calls it, which is itself producing
huge risks of systemic crisis, among others by lending too much in hopes
of getting too much back in interest (or in Enron's case, by "backing up"
commodity exchange with pure speculation). The only viable solutions are
to return to some degree of collective control over the economy at the
national scale (i.e. some effective central planning, Keynesian policies
and so on), while at the same time regulating the credit-money infrastructure
much better on a world scale, because at this point it's pretty much ad
hoc, and that encourages abberations in the whole surveillance architecture
(not to mention making planning impossible, and creating huge systemic
risks of krachs and deflationary spirals). But as soon as you say what
I just did, you realize how important the two little answers are in terms
of critique and counter-power (or "sub-politics" as Ulrich Beck says).
That's why I'm a member of Attac (the would-be regulators) and prefer to
hang out with anarchists. In the face of the coherent state and world-government
functions that we need to protect ourselves from turbo-capitalism, modes
of private association that are either outside money, or potentially, rest
on non-capitalist moneys of one's choosing, are vital in the literal sense
of the word. Because large-scale, rationalized trust-producing systems
have the inconvenience of crushing the life out of the people who are supposed
to trust each other. Brian ----------!!!!!!!----------- Also REALLY good:
http://www.phillyimc.org/alternatives/ --------!!!!!!!--------- Brian
One of the core ideas of open money is that anybody that uses money can
use more, especially if it means they can get on with what they love rather
than working for some globocorp. LETS and other open money systems provide
the means for all to have their own money. Programmers, and others, can
then be paid for their "hobby" in money that circulates within their communities
and pays for some of the basic necessities of life. Kermit nails the issue
with this.... >So the interesting economic question about open source development
isn't why >some people do it for free. Instead, I propose that we consider
instead >what kind of contractual instruments, other than those that impose
legal >monopolies, are capable of creating sustainable economies. As Keith
Hart wrote in his book, Money in an Unequal World, "money is the problem
and the solution." Conventional money, simply because of the way it works,
creates unsustainable economies - corporations get bigger, people poorer,
the earth suffers. Because it is scarce, people will do anything to get
it. >Recasting the >discussion in these terms can also make it clearer
why the "open money" >issue is related to the "open source" and "free software"
discussions. >After all, both currency and software license agreements
are contractual >instruments, and the issue before us is whether such instruments
can enable >a sustainable economy without resorting to the restrictive
monopolies of >central banking and copyright, respectively. Community money
is very different by design. It is created in sufficient supply, by us,
when needed. It's only utility is as an exchange medium - it works when
it moves. What is also of great interest is how open source and open money
will work synergistically to create the kind of world we desire. Both arise
from anarchist principles of mutual aid, which work best when we acknowledge
the gift. I have used free and share ware without paying for it, not because
i didn't want to but because i am always short of money - that acknowledgement
goes to the bottom of the list. When programmers start accepting community
money, i will be able to pay them. Indeed, it will be a great pleasure
to finally be able to acknowledge all the gifts that i receive with more
than a thanks. When i do pay you in a community money that you can use
to buy groceries and computer gear, i am creating new money. It is my commitment
to my community that i am good for that money - my money is my word. >Naturally,
there are many possible problems with such a system. What >happens, for
instance, if people establish accounts on a LETS system, "buy" >expensive
items, and then leave without ever having sold anything >themselves? Essentially,
they've stolen from the community. The first answer to this is seller beware
- caveat venditor - do you know the person you are selling the expensive
stuff to, either directly or by reputation? The other answer is a question
- as a seller, what have you lost? The money you have been paid is still
good - like getting normal cash instead of a cheque. The system continues
to function despite people leaving and dying with negative balances. >
If too many >people do this, the system will collapse. What kind of community
is this? Certainly not one that i would want to do business in anyway.
> Or what if everybody on the >system is selling aromatherapy and no one
is selling legal services? This is the current state of most cc systems
around the world. When community money can buy groceries and pay the rent,
then it will become a significant part of the economy. We believe that
is inevitable. > If >there is a unbalanced distribution of products or
services on offer, the >system won't work. Actually, it does work - persistent
but not much used. For the few who do use them, they are very useful. One
of the women in the Comox Valley LETSystem which has been operating for
almost 20 years said she decided not to move from the valley because she
couldn't find another community that she liked that had a LETS. Thanks
for opening up this discussion. We see great potential in the convergence
of open money and open source. ernie yacub www.openmoney.org > -----------------The
key intellectual and practical breakthrough consists in > thinking of community
currencies as plural rather than singular. With this statement by Keith
Hart, further elucidated by those of his colleagues, I reached enlightenment.
We're certainly fortunate to have had the world's leading experts on LETS
join our discussion. I now have some new worries, however. But first I
want to make sure the problem's not on my end. As I understand it, LETS
designs are completely agnostic with respect to issues of trust. In fact,
that's precisely the claimed breakthrough. By design, LETS systems make
absolutely no assumptions about the economy, topology or culture of the
communities that use them. By eliminating the concept of interest, LETS
leaves it up to the communities themselves to devise their own norms and
mechanisms for dealing with the risk of default. In fact, a community may
choose not to address the risk at all. If it is sufficiently small and
saintly (or simply harmless) it may be perfectly safe to allow any member
to "create money" anonymously to her heart's content. The key point is
that any self-constituted community may enjoy the market-making benefits
of a currency without having to buy into a bundled social norm that it
may find inappropriate, unnecessary or even oppressive. This LETS design
feature leads directly to the concept of plurality of currencies. Because
such systems don't assume any social norms in their design, they may be
used efficiently by any kind of community, from commercial banks to autonomous
worker collectives. Instead of the monolithic, one-size-fits-all design
of national currencies, the LETS design enables a flexible constellation
of interacting payment systems that operate for different purposes and
on different levels of scale. This improved modularity of design allows
the advantages of currency to penetrate those hard-to-reach places in the
economy, such as non-profits, the self-employed and the NGO's, that are
currently ill-served by the existing "central bank" design. (By the way,
this modular design for flexibility reminds me a lot of best practices
in computer science, such as "separation of concerns" in object-oriented
analysis, normalization in database schemas and orthogonality in microprocessor
instruction sets.) It was this plurality that was argued against Felix
Stalder's main concern, which was that the transfer of trust "from the
token to the person" (to invert Felix's elegant phrase) would inevitably
harm personal privacy. In support of this, he pointed to the elaborate
and invasive actuarial-forensic methods of the existing credit card regimes.
The LETS experts answered by appealing not only to the above-mentioned
agnosticism of their design with respect to enforcing social norms, but
also to the plurality of payment systems they envision. In other words,
the multitude of systems means that there will always be a currency available
that suits one's privacy needs. Some will allow anonymous transactions,
some won't. The customer is free to choose. But at this point, I caught
a whiff of Milton Friedman and started to worry. I'll get right to the
point. Isn't what we're really talking about here the eventual privatization
of the monetary system? Consider, as an analogy, the present (yet fading)
system of national currencies. Every sovereign state has the right to "create
its own money," and usually does. But in practice, the dodgier the country,
the dodgier its currency. If we give the same right to individuals or ad-hoc
communities, what's to prevent the current international situation from
becoming universal? So much for the old democratic principle that "one
man's dollar is as good as another's." The poor and marginal may indeed
have more currency at their disposal once LETS systems become widespread,
but their currency is likely to be less acceptable than a rich person's
and may, in fact, be completely unable to buy certain goods in any amount.
Today's wealthy, advanced OECD countries may become like the Soviet Union
once was, with a miserable ruble economy for the masses and a luxurious
"hard currency" economy (complete with separate shops) for the well-connected.
I realize, of course, that this isn't what the inventors of the LETS design
intend. But as they've just taught us, the technology is agnostic with
respect to social norms. ("Once the rockets are up, who cares where they
come down?") And, with my hat off to them, I believe its adoption is inevitable.
I don't at all dispute the fact that LETS could greatly benefit currently
marginalized communities, but it also offers potential benefits to global
corporations, both in terms of profits and social control, that are simply
staggering. Just as Internet-enabled "granular" advertising bequeathed
us today's privacy nightmare of CRM and "one-to-one marketing", the potential
for a DNS-enabled "granular" and privatized monetary system opens up brave
new worlds of opportunity for price discrimination. (This is economist-speak
for the hugely profitable practice of charging based on elasticity of demand,
i.e., effectively higher prices for those who have less market power.)
I think it's safe to say that once today's business leaders have grasped
the concept, if they haven't already, they'll co-opt LETS as soon as it's
legally and politically possible. Long before the "multitude" catches on.
Unless, of course, the "multitude" rediscovers effective political activism,
and soon. Getting back to the Open Source movement, Lawrence Lessig is
completely relevant here. Everybody in the movement seems to have latched
on to his slogan "Code Is Law", but that's probably his worst and most
misleading turn of phrase. His main and best message has been completely
ignored: that there is nothing inherently progressive about the Internet.
It certainly has much liberating potential, but it can also enable a commercially-driven
nightmare of "exquisitely oppressive control." It all depends on the political
choices we make and the effectiveness of our actions. The LETS technology
is one of the most potentially liberating Internet-based technologies I've
ever seen, but it's also perhaps the single most dangerous. Unfortunately,
the commercial banks are currently the best-positioned to understand and
profit from it. We need to educate ourselves fast. Kermit Snelson --------------
Kermit Snelson has it right on all analytical counts and he is entitled
to his opinion about the likely consequences. The version of LETS we propose
has detached itself from some of the scaled-down features of a pseudo-national
currency by going infinitely multiple; and the social norms that once gave
LETS a feel-good factor (also oppressive to some) have been left out of
the design in favour of promoting a system that sustains confidence, but
does not require trust. LETS in this guise should increase democracy, but
it may not reduce inequality by itself. As he says, the rich and corporations
may be able to take advantage of the method more easily than the poor.
This applies with force to methods relying on advanced machines. We know
that the reduced power of nation-states has open up space for corporate
capitalism and that this constitutes a global political crisis. The LETS
model is a potential tool in the hands of progressives everywhere, but
if the powerful are faster to organize than their opponents, it will not
help the latter much. Kermit cites Lessig as saying that the social consequences
of the internet are potentially neutral, which is true. But the internet
remains one of the most powerful means at our disposal for making a better
world and that is what resistence to enclosure of the internet commons
is about. Engels wrote an essay, Socialism -- utopian and scientific, in
which he argued that a socialism which understood the forces at work in
the contemporary world was more likely to succeed that one that appealed
to an impule to 'Stop the world, I want to get off. But he warned that
society was being organized rapidly at the top, using these same forces,
and this might outstrip the socialist movement from below. His fears were
justified, as it turned out. But was that a good reason for abandoning
the socialist cause then or now? Engels made it clear that socialism meant
economic democracy for him and that suits me too. If we are talking about
the privatisation of money (which we are), the relevant liberal economist
is Hayek, not Friedman. The Chicago school favoured absolute control of
the money supply by the central bank in order to let a quantity theory
of money govern the markets. Hayek was inspired by the pioneering efforts
of Scottish banks in the 18th century to advocate a system with no control
by states whatsoever. Talk of abolishing the state through LETS is going
bring the Fed (or the Bank of Japan or The European Central Bank) down
on our heads quick. In practice LETS is likely to get going at first as
a 'mice in the basement' strategy that does not threaten the establishment.
But, when corporations and ultimately the banks take it up, it will obviously
be in a poltiically diluted form, but also one that stands a chance of
reaching more people, to do what they want with it. We therefore minimise
talk of th eincompatibility of national and community currencies, stressing
their comlementarity. We also support alliance across the social spectrum,
such as the Japan Open Money Project. Even so, there is more than just
a sense of little furry mammals among the dinosaurs. Again, we know that
we face a political crisis concerning the forms of assocaition that would
allow us to resist domination by big capital and achieve our public ends
effectively. There is no reason why the existing nation-states should not
take their place among these. But it is likely that we will also need to
associate more and less inclusively than that. LETS is compatible with
that vision. I repeat the message of an earlier post. Open money could
be a means of making certain forms of political association more objective
and it is a method of political education. It is not a one-horse recipe
for everything and it should not be judged on the basis of a zero sum exchange
with the status quo. >By the way, this modular design for flexibility reminds
me a lot of best practices in computer science, such as "separation of
concerns" in object-oriented analysis, normalization in database schemas
and orthogonality in microprocessor instruction sets.< This exchange
is a two-way street. Michael Linton was trained as an engineer, whereas
Ernie Yacub and I are, as he confessed, extremely low-tech. Yet we all
recognise the importance of learning from 'best practice' in computer science.
If Kermit noticed some apparent correspondence between LETS design and
free software/open source/computing best practice that was intentional.
We would certainly like to hear from others who could help us to develop
the comparison. Keith Hart If a community is small enough, you barely need
a currency - you can just barter (which is what these instruments are really
all about). But what about buying anything more complicated than a locally
produced haircut? Where will the haircutter get scissors and clippers?
What does money represent? Past labor time used as a claim on present or
future labor time? If you're going to exchange products of labor across
an area larger than a backyard, or over a timescale longer than the day
after tomorrow, you need something more formal - and state-backed. If you're
going to trust the person and not the token, you have to know everyone
invovled, which makes production beyond the most intimate scale nearly
impossible. The U.S. had all kinds of local and private moneys in the 19th
century, and there were frequent crises - frauds, defaults, panics, etc.
It seems like people are fetishizing the instrument of exchange rather
than the system of social relations it both constitutes and depends on.
Doug Henwood --------- Michael H Goldhaber on Fri, 18 Jan 2002 06:41:01
+0100 (CET) [Open Source and Open Money From: Michael H GoldhaberDate:
Thu, 17 Jan 2002 21:36:01 -0800 References: <200201171237.HAA11413@bbs.thing.net>
Reply-to: nettime-bold@nettime.org I have long felt that ?open money? in
its various forms is a red herring, partly for the reasons Doug Henwood
offers, but more because there already exists a ?natural? and open system
of exchange that lends itself to ?open source? and other possibilities
of the Internet. That is the flow of attention. If, e.g. you write good
code and make it available as open source, you will get attention. Once
you have this, you may make use of it in various ways, ranging from getting
a job coding (something else) to having a devoted entourage (if you have
enough attention) eager to pay attention to your every wish, of whatever
nature. As I have often emphasized, there is nothing necessarily utopian
about this. Attention is scarce, and some get more than an equal share,
which inevitably means that others get less. Anyone can choose to devote
a certain portion of their own attention to those who for whatever reason
don?t have much of it. This means going against the grain of learned if
not innate tendencies to pay attention to those who either already are
getting a lot of it (stars) or those who are particularly skilled at getting
it in some way. Existing monetary systems increasingly serve simply as
means of mapping attention flows. Those who have more attention tend to
end up with more money (though some still get money (mostly by inheritance)
without being good at snagging any kind of attention. Any kind of system
that mimics money will still depend on individual's being able to get attention
somehow. It will be no more inherently equality-producing than the way
attention itself is equally shared. Also keeping track of separate currencies
mostly simply duplicates the fact that everyone, automatically, keeps track
of whom they have given attention to. Except for some very specialized
purposes, open money is therefore an unnecessary invention,and not a particularly
progressive one. As for Kermit Snelson?s fear that specialized open money
can be used by corporations for purposes such as price discrimination,
is this new? Don?t large corporations and their leaders in effect have
all the flexibility they want to construct markets as they see fit, and
to favor those to whom, for whatever reason, they prefer to give attention?
Felix Stalder worries about privacy. Privacy (in the sense of not getting
attention) is often highly desirable in an economy of material things.
One does not want to draw attention to one?s holdings or proclivities lest
one be robbed in some way. In an attention economy, it can be advantageous
to reveal all, for that gets one more attention. The better known you are,
the harder it is to get away with stealing attention (which means, in practice,
anything) that should be yours. What one does not want is to be forced
to pay attention against one?s will, a very opposite kind of privacy to
that usually meant. Of course, progressives should favor steps that will
help equalize attention. We do have to fight for, among other things, keeping
the Internet open to everyone as a potential and flexible means of attention
getting, rather than seeing it restricted only to those who are sanctioned
by large companies. Lawrence Lessig?s pessimism on this score is probably
realistic, but his deeper message, that we should keep fighting even so
is still justified. > -- Best, Michael H. Goldhaber --------------- ------
http://amsterdam.nettime.org/Lists-Archives/ nettime-bold-0201/msg00358.html
= In Gold We Trust, by Julian Dibbell Wired, 10.01, January 2002 While
we're on the topic of money, I thought I'd post an article of mine from
last month's Wired, about an online gold-backed currency that in some ways
parallels, in some ways diverges from, and in some ways downright opposes
the model being discussed here as "open money." That the experiment involves
a curious alliance between heartily anti-statist American libertarians
and radically anti-capitalist European Sufi Muslims only adds to the entertainment
value, I trust. (Sorta sounds like some kind of Bizarro World version of
the nettime community, actually.) So: Are these goldbugs out of their gourds?
Is the LETS crowd any less so? Are they all just fetishists of the token
of exchange (as Doug Henwood would have it) or are they on to something?
Compare, contrast, discuss. HTML available at: http://www.wired.com/wired/archive/
10.01/egold.html WARNING: 6000 words ahead In Gold We Trust >From gun-wielding
libertarians to radical Muslims, an unlikely global cabal is plotting financial
revolution. And they're putting their money where the Web is. By Julian
Dibbell [part 1] Thirty miles south of Florida's Cape Canaveral lies the
town of Melbourne, home to the Action Gun pistol range, where, on a balmy
Thursday afternoon, James Ray stands calmly firing round after Glock 9-mm
round at a photocopied image of Adolf Hitler. Ray supplied the target himself.
He purchased it on the Web site of one of his favorite nonprofit organizations
(Jews for the Preservation of Firearms Ownership), and its ideological
content is not what you'd call subtle: Against the background of a standard
ring target, the Führer stands in full Sieg heil mode, his arm up
high and his sternum right in the bull's-eye, above a caption that reads
ALL IN FAVOR OF GUN CONTROL RAISE YOUR RIGHT HAND. By the time Ray has
had enough of the Glock, the target is nicely perforated. Then he picks
up his .44 Magnum hand cannon and blows Adolf pretty much to bits. Yes,
Jim Ray is a gun freak. But as it happens, the purpose of today's visit
to the pistol range is not to huff powder fumes or celebrate the Second
Amendment. He's here to show that there's a type of money you can believe
in without also having to believe in the authority of the state. He's here
to offer a glimpse of a world in which wealth resides ultimately not in
flimsy pieces of government-issue paper but in rock-solid slabs of $279-an-ounce
metal. He's here, in short, to demonstrate the vanguard of monetary technology:
a 5,000-year-old form of cash called gold. Or in this case, e-gold, the
world's first 100 percent precious metal-backed Internet currency, with
which Ray pays for his outings at the gun range and a lot more besides.
The private currency was launched five years ago and is now operated by
two separate but tightly linked companies: e-gold Ltd., incorporated in
the Caribbean island state of Nevis as a holding company for the system's
assets, and Gold & Silver Reserve, headquartered in Melbourne, which
takes care of everything else. Both are closely held and managed by e-gold
chair Douglas Jackson. In addition, Jackson has forged a partnership with
Islamic entrepreneurs to launch e-dinar, which is foreign owned. Jim Ray
works for G&SR as "lead evangelist." He draws his monthly salary in
e-gold; each gram sitting in his Web-based account gives him title to a
gram of real gold held in vaults in London and the United Arab Emirates.
Sometimes he trades his e-gold for e-silver, e-platinum, or e-palladium
- the other, far less popular, metal-backed currencies offered in the e-gold
system. More often, he trades it for US dollars through G&SR's OmniPay
exchange service or one of the couple dozen independent exchange providers
who make their living selling e-gold for dollars, marks, yen, and other
national currencies at the standard 4 to 6 percent markup over the spot
price of gold. But otherwise, he spends the stuff like cash, giving it
straight to whoever will take it. And people do. Ray's .44, his Hitler
target, the bullets in his Glock - all were paid for with instant, online
transfers to the sellers' e-gold accounts. And when he settles up today
at the Action Gun cash register, he'll have this afternoon's $18 shooting
fee charged to his tab, which he'll pay in e-gold when he gets back to
his desktop. He'll point, he'll click, he'll type in some account numbers
and a password and, in the blink of a clock cycle, approximately 2 of the
1.7 million grams of solid gold in the system's reserves - a gleaming hoard
of 141 brick-sized ingots - will change owners. "It's the only foreign
currency without a nationality," says e-gold's Jackson. On an average day,
his company's clients make 8,600 transactions, trading roughly $1.6 million
worth of e-gold for goods, services, and cash worldwide. Those numbers
are more than double what they were 18 months ago, and so are most other
statistics. As of November, there were 287,965 accounts in the system,
up from 134,150 at the beginning of 2001, and the amount of emetal in those
accounts, worth more than $16 million, was close to twice what it had been
the previous November. In a sector littered with the corpses of failed
online currencies and other exotic emoney systems - Beenz, Flooz, DigiCash,
CyberCash, CyberCent - e-gold is quietly thriving. Ray calls it "the little
payment system that could" - the operative word, of course, being little.
The company's financials ($5.47 million in revenue; 114,000 funded accounts)
are Popsicle-stand caliber compared with the figures posted by emoney media
darling PayPal, with its $80 million to $100 million in revenue and its
10 million customers. But with fewer than two dozen employees and a marketing
budget close to zero, Jackson's corporate structure runs lean and, as of
the summer of 2000, profitable. The company finally got its first competitors
in 2001 - GoldMoney, E-Bullion, 3PGold, OSGold - attracted to the gold-backed
digital currency space by low barriers to entry and the smell of black
ink. The product's appeal? "Fundamentals," says Ray. For online consumers,
especially those making international purchases, e-gold offers an ease
of use and a degree of anonymity that credit cards can't match. And for
some merchants, of course, the only selling point e-gold needs is that
there are people who want to spend it. After a German customer inquired
about e-gold, Vince Lee, president of TealPoint Software, added the payment
option. "It's not a big part of our business," admits Lee, whose company
is probably the largest of the couple hundred mostly mom-and-pop operations
that take e-gold online. "But in this climate, you can't really afford
to turn any customers away." Ray argues, though, that the advantages for
merchants go further. A transaction fee of 1 percent, capped at 50 cents
per spend, comes in well under the 2 to 5 percent fees charged by credit
card companies. And as for that bane of online businesses, the credit card
chargeback, e-gold is a silver bullet. Unlike almost any other form of
online payment, e-gold clears instantly and finally, with no chance for
the spender to cancel after the fact. Or as Ray puts it, "When you get
paid, you stay paid." Still, Ray knows better than to pretend that these
are the only reasons most e-gold users have bought into the system. Or
even, perhaps, the main ones. For most consumers, the ability to reverse
online credit card charges is decidedly a feature rather than a bug. And
if you're going to pay a nickel for every dollar you turn into e-gold -
as the going rate of exchange requires - you're probably not doing it because
you want to help some online merchant save the same nickel in transaction
fees. More likely, you're doing it at least in part for the one thing e-gold
offers that no other digital payment system before it ever has. You're
doing it for the gold. Which is to say, you're doing it for any of the
complex cultural, psychological, and above all political reasons that make
gold, in Ray's words, "the most emotional spot on the periodic table -
never mind plutonium." As a onetime Libertarian candidate for the Florida
House of Representatives, Ray is well aware, for instance, that a large
percentage of e-gold's early adopters come from the ranks of the laissez-faire
radicals for whom gold has long been an icon of economic freedom from government.
Others are goldbug investors, desperately bullish on the metal despite
years of declining prices. Still others come to e-gold via e-dinar, looking
to honor Islamic financial commandments and subvert the Western economic
system. But all the same, Ray insists gold's philosophical baggage doesn't
stand in the way of its being a technically superior currency. It frustrates
and baffles him, for example, that the only advocacy groups currently taking
e-gold donations on their Web sites are outfits like his cherished Jews
for the Preservation of Firearms Ownership or the cyber libertarian Electronic
Frontier Foundation. "I would love," he says, "to go up to some offensive
antifreedom group like Handgun Control Inc. and say, 'Look, you morons:
You're taking plastic. They're taking a percentage out. Take e-gold and
sell it for a profit. It's better money! Even if you're not a libertarian,
it's better money.'" Ray sighs, as if summoning the patience to wait for
civilization to catch up with him. "Gold," he says, "has always been better
money." *** There are those who would beg to differ - among them, the most
influential economist of the 20th century, John Maynard Keynes, who 78
years ago declared the gold standard a "barbarous relic," unfit for the
complex monetary demands of modern economies. In Keynes' now widely held
view, the problem with pegging currencies to fixed amounts of gold was
that it limited government's ability to adjust the money supply, which
among other things made economic crashes much more brutal than they had
to be. The onset of the Depression drove the point home, and central banks
spent the next 40 years gradually weaning themselves off gold. Finally,
in 1971, President Richard Nixon pulled the plug on the world's last metallic
national currency: the gold-backed dollar. Ever since, the major currencies
have all floated anchorless, backed only by "the full faith and credit"
of their issuing governments. Encountering 141 solid bars' worth of gold-backed
currency circulating on the Internet, therefore, is a little like hauling
a wriggling, gasping coelacanth up from the bottom of the sea: It's a financial
fossil come to life, calmly going about its existence despite decades of
expert consensus that it couldn't be anything but dead. Don't be fooled,
though. The convergence of gold and the Net - of the oldest of low tech
and the newest of the high - isn't nearly the freak encounter it appears.
When Douglas Jackson first conceived of e-gold in 1995, he had barely heard
of the Internet. Likewise, when longtime gold-market analyst James Turk
founded GoldMoney last February - Jackson's most serious competition -
he was making good on a concept he'd started thinking about in 1979, back
when he still doubted that the technological infrastructure to support
it would exist in his lifetime. But both men knew as soon as they encountered
the Net that their currency belonged there - and not least because classic
gold money and the core mechanisms of the Internet are in fact strikingly
analogous technologies. The international gold standard was one of
the technical wonders of the highly globalized late-Victorian era - a sophisticated,
elegant mechanism for transmitting value from one end of the civilized
world to the other. National monies existed, of course, but in effect were
just local network protocols running on top of the internetwork layer that
connected them all. Or as the Nobel Prize-winning economist Robert Mundell
has put it, "Currencies were just names for particular weights

of gold." The dollar,
for instance, was fixed by statute at 23.22 grains (about one-twentieth
of an ounce), the pound sterling at 113.0016 grains, and so on. Local payments
were made in local units, but all cross-border deals ultimately were settled
through international bank-to-bank shipments of the universal currency
- bullion. Today, in a world just now returning to Gilded Age levels of
economic interdependence after a century of hot and cold global warfare,
the closest thing we have to a universal money is the US dollar. But as
with most proprietary standards, many argue, the dollar introduces costly
inefficiencies into the system - from the distorting influence of US monetary
policies on non-US markets to the simple fact that final clearance of dollar
payments still takes place only during East Coast banking hours. Clearly,
says Turk, if the Internet is going to become the engine of global commerce
it's cracked up to be, it needs a currency it can call its own - a currency
as nonproprietary and international as the Internet itself. "And gold seems
to be the logical candidate," he says, "because after all, that's gold's
traditional role. It's international money." But if gold does good things
for the Internet, says Jackson, the Internet does even better things for
gold. E-gold isn't your great-grandfather's gold standard. It's new and
improved, Jackson argues, fortified by the rigor of free-market discipline
and the openness of digital networks. And if you think that's no big deal,
well, Jackson - a 45-year-old former oncologist and entirely self-taught
economist - would like you to know that his invention represents "an epochal
change in human destiny" and "probably the greatest benefit to humanity
that's ever been thought of." How so? Invulnerable to government manipulation
and subject to the kinds of market forces only a worldwide, 24/7, open-ended
network can bring to bear, e-gold promises not simply better money but
the best: a money supply kept so straight and narrow that it has room for
neither bubbles nor crashes. And "this," as Jackson is fond of claiming,
"fixes something that's been screwed up since before the pharaohs." After
millennia in which the boom and bust of the business cycle has washed ceaselessly
over human affairs - playing havoc with the lives of rich and poor and
even now blackening capitalism's good name - e-gold has arrived to still
the waters. E-gold is here to bring capitalism to a kind of perfection.
Not that it's a foregone conclusion. Some of Jackson's closest business
colleagues, after all, like to think e-gold might actually bring capitalism
to its knees. [end of part 1] part 2: http://amsterdam.nettime.org/Lists-Archives/
nettime-bold-0201/msg00359.html It's a hot high noon in Dubai, United Arab
Emirates. Faint, muggy breezes are blowing in off the Persian Gulf; and
in the shopping malls, Mercedes dealerships, and air-conditioned Starbucks
of this deliriously prosperous city-state, loudspeakers are discreetly
broadcasting the muezzins' call to prayer. The call can also be heard,
if you listen hard enough, inside a 12-foot-square, steel-and-concrete-walled
storage vault located in Dubai International Airport's heavily guarded
cargo-holding facilities. But if you're inside the vault, your mind is
probably on other things. Like, for instance, the $7.5 million worth of
precious metal piled up around you: five flat bars of chrome-bright palladium;
two large plastic jars full of powdery platinum sponge; 160 fat, tarnished
loaves of silver; and - on a single shelf, laid out one next to the other
like babies in a maternity ward - 58 slender, radiant bricks of 99.9 percent
pure gold, about 400 troy ounces each and altogether worth more than $6.5
million. These assets represent nearly half of the e-gold system's physical
reserves, and there are, arguably, sound business reasons for storing them
in this part of the world. Dubai, sometimes called the Switzerland of the
Middle East, offers the financial sophistication of a major commercial
hub, the low overhead of a mostly immigrant labor pool, and the high security
of a politely authoritarian mini-monarchy. But the truth is, the gold is
here because Allah commanded it. Or at any rate, because the passionate
believers behind e-dinar - the network's Muslim-friendly frontend - believe
He did. When Douglas Jackson and the e-dinar principals began the negotiations
that culminated in e-dinar's September 2000 launch, Jackson was told up
front that a proper Islamic currency requires a proper Islamic country
as its base. Obligingly, he moved some of the company's existing assets
from ScotiaBank in Canada to Dubai's Transguard repository (the rest remains
with J. P. Morgan Chase in London) and even rewrote his governance contract
to give e-dinar a limited veto over bullion transfers out of the vault.
In return, e-dinar agreed, in effect, to help market the e-gold system
to the world's 1.1 billion Muslims. The pitch? Late one night in the lobby
of one of Dubai's five-star hotels, a 46-year-old Muslim named Abdalhasib
Castiñeira lays it out, sipping chamomile tea as he outlines a brief
theology of money and calmly prophesies the downfall of the worldwide capitalist
imperium. A gaunt, neatly bearded Spaniard, Castiñeira is marketing
director of the Islamic Mint, a private institution dedicated to reviving
as international currency the coinage described in the Koran - the gold
dinar and silver dirham. He has placed on the table before him two small
gold coins inscribed with Arabic scripture. The Islamic Mint makes them
and they represent, says Castiñeira, the Islamic virtues of fair
trade and honest value. Give someone a piece of gold, the argument goes,
and you give him a real asset whose worth has endured throughout millennia.
"Whereas this," he says, pulling a crisp US hundred-dollar bill out of
his wallet, "is just a promise." Put your faith in it, and you submit to
a system ultimately controlled by governments and corporations, a system
that when it collapses - "all empires fall sooner or later," he says -
will take the dollar down with it. "But if you hold this," he says, picking
up one of the gold coins and weighing it thoughtfully in his palm, "you
are free." The coin in Castiñeira's hand contains 4.25 grams of
gold, just as the dinar did in the time of the Prophet. Likewise, and by
no coincidence, the e-dinar's primary unit of account is also 4.25 grams
of gold. Officially, the Islamic Mint and e-dinar are separate organizations,
but they're actually the off- and online divisions of a single project,
joined by ideological and personal ties. E-dinar's British COO, Yahya Cattanach,
and his family share a communal condo with Castiñeira in the comfortable
Jumeirah district of Dubai. The company's Spanish president, Umar Ibrahim
Vadillo, is also the president of the Islamic Mint. And finally, uniting
all three men - as well as e-dinar's Swiss CEO, Malaysian CFO, and German
CTO - is one crucial biographical datum: All are high-placed members of
the Murabitun movement, a modern, Western offshoot of Sufi Islam and possibly
the only religious sect in history whose defining article of faith is a
financial theory. *** There aren't too many Murabitun in the world; they
number probably in the thousands. But they are avid proselytizers, supported
in part by Dubai's royal Maktoum family, and they've established significant
communities in Germany, England, South Africa, Indonesia, and Spain (though
none is quite so impressive, perhaps, as the Murabitun outpost in Chiapas,
Mexico, a community of 600 local Indians converted in the midst of the
Zapatista uprising). Scattered though they are, community leaders see one
another often, convening regularly in the small Scottish town of Achnagairn,
home to the movement's founder and patriarch, the 71-year-old Sheikh Abdalqadir
As-Sufi. For most of his life, the sheikh went by the proper Scots name
Ian Dallas. In the 1960s, he worked as an actor and promoter, making the
scene in London and Paris and hanging with Allen Ginsberg, the Beatles,
and other hippie icons. Increasingly disillusioned with the counterculture,
Dallas wound up in Morocco, where he met the Sufi spiritual leader Sheikh
Muhammad ibn al-Habib and became a Muslim. Sheikh Muhammad had a vision:
The modern revival of Islam, he believed, would come from, as he put it,
"the people who pee standing" - from Westerners. Ian Dallas, now Abdalqadir,
was anointed to take the lead. "Go to your land and see what will happen,"
Sheikh Muhammad told him, and he went. Back in London, Sheikh Abdalqadir
slowly gathered acolytes from among the drifting spiritual seekers of the
day. Murabitun legend has it that pop star Cat Stevens (later Yusuf Islam)
got his first exposure to Islam from Sheikh Abdalqadir, when both of them
used to hang out at T. Rex singer Marc Bolan's house. Others became hardcore
followers, donning djellabas and turbans and helping the sheikh shape Murabitun
belief into a curiously worldly mysticism - a radical Islam tinged with
elements of classic European anarchism, moderate feminism, refined anti-Semitism,
and dense Heideggerian phenomenology. It wasn't until the mid-1980s, however,
that the members of the Murabitun truly began to set themselves apart from
the run of post-hippie spiritual movements. Sheikh Abdalqadir came to believe
that if there was anything a group of Western Muslims was best positioned
to contribute to the world, it was an Islamic cleansing of the global financial
system. And so he set his closest followers - in particular Umar Vadillo
- the task of studying classic Islamic texts on money, with a view to drawing
out their modern implications. The result, published in 1991, was the "Fatwa
Concerning the Islamic Prohibition of Using Paper-Money as a Medium of
Exchange." In the wake of fatwas sentencing Salman Rushdie to death and
launching Osama bin Laden's terrorist jihad, Vadillo's sounds almost comically
wonky. But make no mistake: This is an extreme document. The Bible condemns
the financial practice of usury, certainly, and Islam does so even more
firmly, prohibiting as haram, or unlawful, not only excessive but any interest
charges on debt - a stricture that generally requires orthodox Muslims
to leap through awkward theological hoops just to keep their money in a
bank. But what Vadillo objects to, and in no uncertain terms, is modern
money itself. "After examining all the aspects of paper money," he writes,
"in the Light of the Qur'an and the Sunna, we declare that the use of paper
money in any form of exchange is usury and therefore haram." Naturally,
you can't comply with the fatwa merely by paying with plastic instead of
paper. Paper money is a usurious cheat, Vadillo argues, largely because
it has become "nothing but a pure symbol with no reality attached except
the imposition of law." And since that same unreality undergirds the entire
monetary system, the only honest way to escape its taint is to strive for
the entire system's destruction. The fatwa, in short, is a call to financial
jihad, and the struggle, Vadillo predicts, will be an unconventional one.
Muslim information warriors will hack into banking networks and "transfer
money at random." They will create dummy companies and "absorb debt that
will never be paid back." They will "raid" the diamond and gold markets,
which, according to Sheikh Abdalqadir's way of thinking, represent the
hoarded wealth of the world's great usurers, the Jews. But these are tactics
for a war that has yet to come, and may not ever. For now, and before all
else, there's one thing Muslims everywhere need to do to hasten the end
of the paper-currency regime and with it the demise of capitalism, the
liberation of Islam, and the restoration (insh'allah) of the caliphate:
They must work together to create a righteous alternative. They must bring
back gold and silver as a standard medium of exchange. *** What was Douglas
Jackson thinking when he hooked up with these guys? If he could have looked
into the future, would he have guessed that, at the start of 2002, the
world's attention would be riveted on pan-Islamic radicalism and its links
to, among other things, obscure international money networks? And if so,
would he still have steered his own obscure international money network
into so close a partnership with the Murabitun? Probably. So far, Jackson's
only second thoughts about the e-dinar deal have been to wonder just how
much appeal the Murabitun's financial extremism really holds for the average
Muslim. "The jury's still out," he says somewhat ruefully, noting that
in a year of operations the funds held in e-dinar accounts have barely
added up to a single bar of gold. For this and similarly mundane reasons,
Jackson was already looking to loosen e-dinar's connection to the e-gold
system months before the World Trade Center collapsed, and he insists the
political mood since then hasn't added any urgency to the task. And why
should it? In the weeks since September 11, investigators have painted
a pretty clear picture of the kind of networks they think al Qaeda &
Co. are moving their money around in, and it doesn't include anything as
Net-savvy as online payment systems. And even if it did turn out that al
Qaeda funds have passed through e-dinar, one thing's for sure: The Murabitun
wouldn't be thrilled to hear it. For years they have publicly proclaimed
their contempt for terrorists of every stripe, and in the wake of the September
attacks, their stance has only hardened. Shortly after 9-11, Sheikh Abdalqadir
issued a declaration excoriating Osama bin Laden and the Taliban. The attacks
themselves he condemned as horrific and, more to the point, futile. "Bombing
a building which houses a magical wealth system, which has no physical
reality but remains simply electronic impulses in the digital archives
of computers, far from attacking or weakening the system, strengthens it,"
wrote the sheikh. "A true study of the Qur'an and the Sunna shows us that
capitalism will not be abolished on the battlefield but in the marketplace
where it is practiced." "Look, we are against terrorism more than Bush
is," Vadillo explains via email. "You want to be radical? You don't need
to blow up the bank, just burn your bank account. And for that you are
going to need an alternative. What is the alternative? E-dinar." That's
not to say Jackson shouldn't be worried about tainted money coursing through
the e-gold system - or that he isn't. But what troubles him most are the
Ponzi schemes: Hundreds of online pyramid scams have made e-gold (because
of its convenience and because it offers bilked users no way to cancel
charges) their payment system of choice. It gives some sense of how much
these operations have contributed to e-gold's bottom line to know that,
to this day, the single largest holding in the e-gold system - $1.1 million
in gold, 8 percent of total reserves - sits unclaimed in an account belonging
to an alleged Ponzi that shut down a year ago. As for more recent activity,
Eric Gaither of Gaithman's, one of the leading independent gold-currency
exchanges, guesses that "at least 50 to 60 percent of e-gold" transactions
are headed into or out of what he and others sometimes euphemistically
call HYIPs (high-yield investment programs) or simply games. Other reputable
exchange providers put the figure between 30 and 90 percent. "Frankly,"
says Steve Foerster, former CTO of G&SR and currently COO of Dominica-based
gold currency 3PGold, "without online games right now there would be no
gold economy." For his part, Jackson vigorously denies HYIPs account for
anything approaching a substantial portion of e-gold traffic. "These are
piddly-ass little things," he says. "When you actually run one of these
things down, they're pathetic." Still, he concedes, they're a PR liability,
and he and his staff have been working hard to squeeze them out of the
system. They've instituted "know your customer" rules to identify suspected
swindlers, and they've cooperated amicably with law enforcement. When SEC
staffers came to G&SR's offices last May to review the accounts of
one of the biggest e-gold schemes ever - the self-styled "Christian-based
humanitarian organization," E-Biz Ventures, shut down after allegedly inflicting
losses of $8.5 million on investors - they were welcomed with coffee, bagels,
and a conference room of their own. J. Chris Condren, the attorney charged
with recovering E-Biz investors' money, has only good things to say about
e-gold. "They've answered every question we've asked them, they've responded
to every subpoena, every request for information." Still, Jackson sometimes
seems almost baffled that anyone could care who uses e-gold and why. It's
all the same for him, for instance, that most users haven't a clue about
the profound macroeconomic consequences he sees in e-gold. "They could
be doing this for the dumbest reasons, we don't care," he says. "All we
need is a growing circulation." For Jackson, the only thing that really
seems to matter is what happens when the circulation gets big enough for
e-gold to matter. Will he be proved right or not? Will e-gold bring about
an epochal change in human destiny or won't it? And if it does, will anybody
still care that once upon a time e-gold was a currency beloved of gun freaks,
Sufi anarchists, and Ponzi schemers? "You're going to have to make a personal
judgment," says Jackson. "Am I some sort of dipshit visionary, you know,
that's got some idea, but what I'm really doing is just sort of facilitating
all kinds of sleazy stuff? Or in fact is this vision one that is achievable?"
*** So which is it? Take your time. And if you really want to get a handle
on the question, try the following experiment. Go out and find a 400-troy-ounce
gold bar, like the ones stored in the e-gold vault in Dubai, and pick it
up. You'll learn something interesting about gold: It's heavy. Maybe you
think you knew this already. Maybe you know gold has a specific gravity
of 19.3, and that this means it's 19.3 times heavier than water. Maybe
you also know gold is heavier than any element known to humans prior to
the 18th-century discovery of platinum, and almost twice as heavy as lead.
But until you've held 400 ounces of it in your hand, you've probably never
grasped just what sort of heavy this stuff really is. Relative to its modest
size, the 27.5 pounds in a standard gold bar is so much weight it's nearly
impossible to accept that gravity alone accounts for the force you feel
as
you lift it. You're tempted to attribute some additional, almost metaphysical,
power to the metal - as if the gold brick in your hand weren't just undeniably
real but a gleaming avatar of reality itself. And whether or not Douglas
Jackson actually thinks of gold that way, he sure tends to act like he
does. Beneath the scaffolding of what he calls his "unassailable economic
logic" lies the true foundation of his vision: the self-assurance of a
man convinced he's discovered something as genuine as it gets in a world
ruled by fiction and cheats. This is why, despite Jackson's efforts to
position his system as a serious financial player - a rival to the major
currencies of the world - little e-dinar remains Jackson's closest corporate
partner. Maybe Jackson wants to fix capitalism and maybe the Murabitun
want to finish it, but both, at bottom, pursue a truth that isn't so much
economic as it is spiritual. Both see in gold a purity that transcends
the machinations of the merely mortal. Which at least answers part of Jackson's
question: Is he some sort of dipshit visionary? Well, no more or less,
really, than Sheikh Abdalqadir As-Sufi, the Scottish redeemer of the Muslim
world. As for whether Jackson's vision is in fact achievable - let's just
say the odds of e-gold effecting an epochal change in human destiny are
probably not much better than e-dinar's odds of bringing back the caliphate.
But both may be better than you think. Last June, Mahathir Mohammed, the
irascible, authoritarian prime minister of financially beleaguered, mostly
Muslim Malaysia, called for the formation of an "Islamic trading bloc."
Like the Euro Zone, the bloc would have its own currency, yet with a twist:
The "Islamic dinar," as Mahathir proposes calling it, would be backed not
by anybody's faith and credit but by gold. As it happens, Mahathir seems
to have gotten the idea for the gold dinar from none other than Jackson's
associates among the Murabitun. If the proposal flies then there is a more
than negligible chance that e-gold could become the base-money system for
an economic community stretching from Indonesia to Morocco. "I want to
jump on that," Jackson says of the opportunity. Already Vadillo and the
sheikh have met with Mahathir to make the pitch, and Jackson hopes to fly
to Malaysia soon to drive it home. Of course, convincing a major world
leader to put the monetary fate of a billion people in the hands of a retired
oncologist from Melbourne, Florida, is not going to be easy work. But Jackson
doesn't seem to mind the challenge. "That's going to be an especially fun
project over the next few months," he says. "I'm gonna have a lot of frequent-flier
miles." [end] ----------------- Thanks to Julian Dibbell for a fascinating
case study which is, of course, much more than that. >Are they all just
fetishists of the token of exchange (as Doug Henwood would have it) or
are they on to something?< Fetishism is a religious concept: it concerns
our attributing agency to a spirit at the expense of recognizing human
agency. In Marx's hands, the spirit became a thing, money, and fetishism
concerned the attribution of life to all the things, commodities, deriving
their exchange-value from money. He thought that this was an improvoment
over religious alienation, since it was more likely to dawn on us that
we make the things and indeed the money also. E-gold and LETS both focus
on the money form. There has to be some point of entry and why not money?
One could equally choose to approach the modren economy by writing about
Wall Street. Or Capital. But the two differ markedly on the issue of human
agency. Gold is the archetypal commodity money whose acceptability is its
real asset value, not any political authority (although, as Keynes pointed
out) such authority has been linked to the standard value of gold for thousands
of years). the idea is to trust the object not the person, to get people
and especially politicians out of the picture as far as possible. This
in itself is not fetishism, but the idea that gold is as solid a basis
for value as an ingot is fetishistic. For the gold price is a function
of human agency: the propensity of Indian peasants to hoard gold rather
than sell it; the level of goldmine production; the number of people who
want gold for whatever purpose; whather states choose to back a gold standard
or not. If Keynes wanted to break the gold standard, it was not just because
having this one source of money stifled liquidity, but rather because he
wanted human beings and their governments to take responsibility for making
their own money, instead of abandoning it in favour of a fetishised object.
One good send-up of gold fetishism is B. Traven's Treasure of the Sierra
Madre, but the best is Fank Baum's Populist allegory, The Wonderful Wizard
of Oz. It should be clear from several recent postings that open money
or LETS is not just about community currencies, but the many forms of exchange
circuit that might be built using them. It has hitherto been understood
that they normally function as small-scale local networks, but this is
an unnecessarily restrictive form and we are now exploring others. This
is a broad church and experimental project that is open to learning from
or combining with any contemporary money system, whether state money, Paypal,
hawala, commercial barter or social credit. Our emphasis is on the people
who make the money they use for exchange. Community cirrencies are issued
by all members whenever any of them goes into a negative balance. The promise
to pay is made by each of them, unlike a single issuer currency (whether
state or private). We believe that these forms are inherently more robust
becaiuse they are democratic and multiple. The default of some members
does not limit the ability of the others to trade. LETS systems cannot
suffer from a run on the bank, although they may experience difficulty
in recruiting individuals willing to trade. In the course of our work,
we often run up against money experts who insist that state money is the
only feasible kind and who have a potted history of money in their heads
that justifies this assumption. They are usually, but not always, academics.
I ask nettimers to judge which is the greater fetish -- to worship one
of two eternal verities, gold or the state, or to try to develop forms
of money issued by the people themselves? Keith Hart ------------- Doug
Henwood: I'm not an academic, though my head is sometimes potted. I'm still
at a loss to understand how these "community currencies" would be used
to pay for products outside the community. Or will every community have
its own steel mill and chip plant? It's a big leap from using scrip to
exchange products at a roughly similar level of technical complexity and
capital intensity - meals for haircuts, housecleaning for dogwalking. But
what about things that require machinery, financing, specialized labor,
and entities that extend across time and space to produce them? How would
a New Yorker like me get a computer or an orange? Once you get beyond exchanging
simple goods and services in a small geographical area, you have to have
a state-guaraneteed token (or gold), or you can't have commerce. Or are
you really proposing that production be undertaken strictly on a local
scale? Do you even think about the relations between money and production
beyond the level of sentiment and wish? Doug ------- do you think that
is a damn foolish question? ernie -------- Keith: Networks using community
currencies are very limited in size of membership and economic scale at
this time. They also tend to be highly localized. There is no question
of them, in their present form, being able to replace existing capital
markets or for that matter public economies financed by state taxation.
It is unlikely that steel mills or computer manufacturing will be funded
in this way soon. But there are LETS systems in which businesses participate.
They may be willing to sell quite complex manufactures on a part national,
part community currency basis. This increases their turnover and expands
the spending power of their customers. The technology that would allow
virtual exchange networks to be organized through open money is in the
process of being developed. This involves multiple currencies operating
through smart cards and internet communication organized through a national
domain naming system. This involves serious international collaboration
in software engineering which rests on more than mere sentiment. It is
true that much of this remains potential, but there are significant actual
achievements and some parts of the economic establishment are taking open
money seriously. Thus some Japanese corporations have joined grassroots
organizations to explore the use of LETS; a department of the government
has also shown interest. Given the ubiquity of mobile phones linked to
the internet there, who knows what will come out of it? The European Commission
in Brussels has begun to look into community currencies as a way of addressing
the problem of electronic micro-payments. The recent Argentinian crisis
revealed a proliferation of self-made currencies below the state level
from the provincial governments downwards. Red Global de Trueque Solidario
issued 15 million creditos in an attempt to get some liquidity into the
economy. There are many precedents for such developments. What makes now
different is the communications revolution breaking out all around us.
So Doug Henson is right to point out that most existing community currencies
operate at a low level of complexity and they cannot organize a full-scale
capitalist division of labour. Most of the achievements I can point to
are more potential than actual. Even so e-bay and paypal have revealed
possibiltities in electronic commerce that would have been unimaginable
a few years back. Those of us working on community currencies see no point
in limiting our aspirations to current empirical knowledge, even less to
the idea that the only forms of money with any clout will always remain
state money and commodity money (eg gold). There is work to be done on
improving the model and inserting it into new situations. It is true that
we are focused mainly on the sphere of circulation, but that is not to
say that we are indifferent to production. It is highly unsatisfactory
trying to persuade a skeptic (to be kind) of what this project is worth
in a few paragraphs of an email message. That is why my partners and I
are currently writing a book about it. It may be that our eyes are trained
on the future more than the past, but our present is fully occupied in
all kinds of practical and theoretical ways. Keynes said that a writer
depends on a lot of sympathy from his readers. If the metaphysical gap
is too great, mutual understanding is impossible. Or, as the Reverend Sidney
Smith once said, while observing an quarrel between two women leaning out
of windows on opposite sides of the street, Those ladies will never reach
agreement, for they are arguing from different premises. I have read Doug
Henson's recent book and benefited from it immensely. I would be interested
in what he thinks of mine. Perhaps these issues can only be pursued effectively
through serious publication. Nevertheless, it may be that some nettimers
have been provoked by these exchanges to think about money in a slightly
different way. Keith Hart --------- Michael Linton (Rookie/Veteran Lets
practititioner) Dear Doug, I wrote this before getting your posting earlier
today on "dollars and donuts" but nonetheless it seems (to me) to bear
on some of the issues you raise. --------- Hi Keith, Happy New Year. At
06:17 AM 19/01/2002 -0500, Keith Hart wrote: >E-gold and LETS both focus
on the money form. There has to be some point of >entry and why not money?
Because tinkering with exchange media wll not and cannot transform the
property relations which characterise a political economic system --- nor
can any form of money be said to characterise any particular form of political
economic system. Exchange media are epiphenomenal to a system, not essential
to it. Best, Phil PS Review of "The Memory Bank" is on its way --- finally.
........ Opinions expressed in this email are my own unless otherwise stated.
If you have received this in error, please ignore and delete it. Phil Graham
Senior Lecturer UQ Business School www.uq.edu.au/~uqpgraha On January 19,
2002 11:19 am, Doug Henwood wrote: > I'm still at a loss to understand
how these "community currencies" > would be used to pay for products outside
the community. ---------- You need to think outside that box. - the
idea of "the" community. Think rather of multiple communities, neighborhood,
locality, region, province, nation and beyond, just on spatial dimension.
Others will be communities of interest, or common purpose, or production,
not of place. Things outside one community may be inside others. Most people
people will use 5 - 10 currencies, organizations will use more. >.......Or
will > every community have its own steel mill and chip plant? ---------
The economic case for all local production will indeed be improved, and
could occasionally lead to steel mills serving local markets - this might
first show at the level of communities of several milllion. More significantly,
consider all the small production enterprises wiped out by "globalization"
and the "rationalisation" of trading - farming for instance. As community
currencies are used for progressively more of the local and regional economies,
many things that used to make it financially, and then didn't, will again.
>.......It's a big > leap from using scrip to exchange products at a roughly
similar level > of technical complexity and capital intensity - meals for
haircuts, > housecleaning for dogwalking. But what about things that require
> machinery, financing, specialized labor, and entities that extend > across
time and space to produce them? How would a New Yorker like me > get a
computer or an orange? ------------- Generally by paying some part of the
invoice in "federal" cash / credit and the balance in community currency.
As an approximate rule of thumb, the retailer / wholesaler / manufacturer
should get their cost of goods (fob plus taxes, direct and consequent)
in cash, and their value-added (mark-up, gross profit) in whatever community
money works for both the buyer and the seller. That's the "how-can-you-lose?"
split. Aggressive sellers can go well beyond that price point where they
have cc for cash substitution options for spending. Hence you can expect
retail gas for maybe 10% "cc", groceries at 15-20%, retail hard goods 20-50%,
restaurants 50% and bettter, services up to 80%, music, theatre and sports
will often be 100%. IP will depend on the license, of course. >.........Once
you get beyond exchanging simple > goods and services in a small geographical
area, you have to have a > state-guaraneteed token (or gold), or you can't
have commerce. ------------- This is a blatant non-sequitur, and dead wrong
besides. Consider the commercial "barter" networks for instance, some now
global in practice. There are more means in heaven and earth, Doug, than
are dreamt of in your short list. >.......Or are > you really proposing
that production be undertaken strictly on a > local scale? ---------------
No - never did, never will. www.gmlets.u-net.com/explore/sustain may help
clarify. >...........Do you even think about the relations between money
and > production beyond the level of sentiment and wish? --------------
One might ask, with equivalent relevance, presumption and attribution -
have you stopped beating your significant other (wife, dog, drum, meat
.. ) yet? But I prudently refrain. Please, in the interests of productive
discourse, do thou likewise. A brief digression of ways of study, enquiry,
learning. A man goes to the city and sees ships built of iron. When he
comes back to his village, the elders throw a flat iron in the river and
conclude him a liar. Much of the reaction to the ideas of open money is
at this level. We are used to it, but that doesn't mean we regard it as
particularly open-minded. There are investigative approaches that seek
to expose weakness, and others that explore strengths. Both are necessary,
but it is interesting to notice which take priority. In this instance,
it's clear (at least to us "LETS" people" who know what we are talking
about when we talk of open money) that most of the critique so far is utterly
off target. Without some knowledge of what we are actually saying, any
analysis is almost inevitably misdirected and mistaken. Sorry about that.
It may make sense to you, and have nothing to do with us. Our materials
are available in several sites, in some chronological order 1986 www.gmlets.u-net.com/letsplay
(ancient - pre internet) 1995 www.gmlets.u-net.com - especially /design
1998 www.communityway.org 1999 www.cctrading.net 2001 www.openmoney.org
For a useful discourse with us, questions that relate to these published
ideas will likely get more attention than questions that don't. btw Doug,
I heard you talking on CBC this morning about Enron. Perhaps your general
view might summarised as "Enron (and other such) are inevitable, it's just
capitalism doing its thing (something smelly, you said) and there's little
we can expect but more of the same" Maybe you would accept my precis, maybe
not. Anyhow, it's more or less my view of the Enron scam, and it's because
I see no realistic solutions available inside that money-box that I (and
others) are working to provide parallel exchange systems with better likelihood
of better ethical behaviour, and positive social, ecological and political
consequences. cheers Michael ---------- Michael Linton wrote: >The money
illusion. Perhaps if you specify just what you consider that to be >we
can discover whether "LETS people" are so elevated. Please define, ---------
This is a naivete affected for rhetorical purposes, right? Surely someone
promoting a scheme for monetary reform would be familiar with the term.
On the off chance the question is serious, the money illusion is a term
in economics, coined I believe by Irving Fisher, describing the alleged
propensity to mistake a nominal change for a real one. Say if inflation
is running at 5%, and you get a 5% raise, your real wage increase is 0%,
but it may still feel like a gain, just because there are bigger numbers
printed on your paycheck. Of course I was using it figuratively - that
by changing the form of money you're somehow changing underlying social
relations. Reminds me of a roommate I had in college, who'd heard that
if you were healthy, your urine was mildly acidic, so he drank vinegar.
Too bad he had a distressing habit of leaving used litmus paper strips
around the bathroom. Doug ---------- This is a naivete affected for
rhetorical purposes, right? -------- Not at all - I have a genuine ignorance
(it was not my fortune to be a trained economist) and was further confused
by a web search that found three distinctly different accounts of the "money
illusion" and several associated variants - none of which seemed to relate
in the least to open money. >......Surely someone promoting a scheme for
monetary reform ------- In point of fact, open money is absolutely
NOT about monetary reform - that's far too ambitious a task for us. The
introduction of complementary currencies is however quite practical. >............would
be familiar with > the term. -------- On the off chance the question is
serious, --------- Entirely serious. I asked because you weren't specific
and I wanted to know what you lmeant and maybe others did too -----------There's
nothing in our world - sites, publications, projects, programs, designs,
software (free) and/or history/records that relates to this definition.
> Of course I was using it figuratively - that by changing the form of
> money you're somehow changing underlying social relations. ------------
This is rather different from Fisher's formulation, but at least it's now
clear what you are saying. And, yes, you have indeed identified the core
of the matter - we do believe that the form of money matters, that here
as most other realms of reality, form and function are related. That's
our position, indeed the kernel of the open money idea set. We have observed
- rocks are hard, water's wet, time flies, gravity sucks and money moves.
So far we have only found two ways it moves, and two forms it takes. One
form - hard money, legal tender, asset backed money etc - moves THROUGH
community. Another form - soft money, mutual credit networks - moves AROUND
within community. That's all we can say for sure about distinctions of
form and function. There's in-and-out, and there's round-and-round. Quite
different. Our experience over 20 years now in a wide range of economies
is that the two forms are radically different in the social relations of
the exchange they support. However, the conventional wisdom of economists
holds that the form of money has nothing to do with its function. Isn't
it economists who lie awake at night wondering whether something that works
in practice can be made to work in theory? Please see www.openmoney.org/fiwg/brief
and www.openmoney.org/way/dif for some leads on this. Michael ------------
Henwood writes: "I've seen no evidence yet that LETS people have given
much thought to the economic fundamentals that the money system embodies.
It's the money illusion raised to the level of a political philosophy,
it seems." -------------- Isn't that slapping praxis a bit too quickly
with theory, Doug? What's interesting in the various LETS systems, and
other forms of trading circles, is the practical response to situations
where the capitalist order is in crisis, either because of financial breakdown
(Argentina), structural inequality (in marginalized rural areas or situations
of long-term high unemployment), or because people want to escape the state
(there you also get right-libertarian alternatives, as we saw with e-gold).
And what's interesting in the practice is the chance for alternative ideas
to be embodied in the lives of people who are not necessarily theorists.
Unfortunately for us, the libertarian right has been better at that in
recent decades than any of the left factions. I can understand some impatience
with the idea that any egalitarian politics can do without a state, and
it's also naive to avoid the question of how the existing capitalist order
influences any subsystem set up inside it; but still it's empirically interesting
to get a look inside some experimental practices that could ultimately
transform our relations to the state(s), and thereby, perhaps, transform
capitalist relations. After all, wouldn't it be interesting to bring people
practically before the questions you ask? About the relations of authority
between bossess and workers, about the planning and financing of productive
capacity? Only when people ask those questions, not as theoretical games,
but as practical life problems, does the status quo evolve in any way.
best, Brian Holmes the next two items on Barter in Argentinia were posted
as 128655 with ref to this item ---------- from: http://www.globeandmail.com
(Print Edition, Frontpage) via "Michael Gurstein" -------- It's smarter
to barter for filling the larder, Argentines learning Heather Scoffield
BUENOS AIRES -- Marta Gonzalez stands stoutly in a corner of a small downtown
community centre surrounded by her children and nieces, showing off her
latest collection of soap, hand cream and popcorn. The food and cosmetics
are not for sale, though. At least not for money. The only way to do commerce
in this place is by swapping your own stuff for hers: barter. It's the
oldest form of consumerism, and it's making a strong comeback in Argentina.
Ms. Gonzalez hopes to trade enough of her goods on this day to accumulate
fruit, vegetables, bread, snacks and clothing for her children to last
through the next week. She's here every week, and she's usually successful.
"I have no money, so I try to do all my shopping this way," she says. "Today,
nothing so far, but it usually moves." This barter club in a residential
neighbourhood of central Buenos Aires has been around since 1995. But now,
with the financial crisis and the problems in withdrawing money from banks,
Argentines are lining up to join such clubs. And they're not poor folk,
either. They're psychologists, carpenters, teachers or financial advisers
who are out of work, having trouble being paid or can't withdraw their
money from the bank. When Argentina's president quit in the midst of deadly
protests, and the country embarked on the largest debt default in history
last month, the new government put strict limits on how much money people
and companies could withdraw from the banks. The result has been a severe
liquidity problem, not to mention anger at the banks and at the government.
Even if people had a nest egg stored up just in case they lost their jobs,
they can't access much of that money now. But unlike the middle-class demonstrators
banging their pots and pans in front of government institutions to protest
against government mismanagement and corruption, the people in the barter
centre don't carry the same stress and anger. They seem almost happy to
have a partial alternative. "This is such a lovely system; you can get
so many things," Maria Carmen Monti said from her wheelchair. She supplements
her pension by buying -- with cash -- tiny calendars, religious pictures
and ribbon. She puts them together to form a small decoration, which she
trades at the barter club. The barter centre tries to encourage trade in
goods made personally by the participants -- homemade or home-grown food,
clothes and handicrafts. Indeed, the centre seems a lot like a church bazaar
in Canada, except no money changes hands. There are knitted sweaters, bottles
of jams and jellies, baked goods, carvings. On the windows at the centre,
professionals have pasted signs advertising their services -- hair cuts,
psychoanalysis, babysitting, mechanical work. On their way inside, people
can pick up a photocopied magazine advertising hundreds of different services
for barter. The pamphlet also has pages and pages of classified ads for
people wanting to buy and sell televisions, stereo equipment and refrigerators.
"We put the accent on what type of work you do, on what you can produce
and not on who you are," said the co-ordinator, Carlos del Mazo, who has
put together a code of ethics for participants to follow. Each of the 600
barter centres in Argentina has started printing credit coupons so that
people can conduct more-complicated three-way trades, he explained. And
each person sets his or her own price, marked in credits. Half a credit
is worth approximately one peso, which is worth just under one Canadian
dollar, at least today. With the crisis, some people have come forward
to sell second-hand goods but the centre discourages the practice, preferring
to deal in new items, Mr. del Mazo said. And some people are now speculating
with the credits. Hugo Montoya is a conn oisseur of barter clubs and carries
around a pack of coupons from clubs all around the Buenos Aires area. He's
a carpenter and can offer his services for goods in return. But he mainly
profits from buying something, with coupons, in one club, and turning it
over in another club for a higher price. The clubs outside of the city
often have thousands of participants offering any kind of item you could
dream of, and so he has a lot of choice. With the liquidity crisis, some
of Argentina's provinces have taken to printing their own money replacement,
too. One province has produced the Patacon, and another the Lecop. The
currencies are actually bonds based loosely on debt outstanding owed by
the provinces. They look like normal pesos on one side, but on the flip
side have a long written description of the instruments used to back the
currencies. They have been in wide circulation for months now, although
more and more stores are reluctant to take them, in case they're worth
nothing. Still, with credit cards being turned away and savings frozen
in the banks, many Argentines, both buyers and sellers, must turn to the
alternatives. Many businesses have started informal lines of credit for
their customers, hoping to be paid if and when the crisis comes to an end.
And many people offering their services for sale have dropped their prices.
Still, the fear of hyperinflation is omnipresent, especially in grocery
stores. There, already, prices of imported goods have been rising quickly
as the peso's value drops. ------ -- http://magma.ca/~gpco/ http://www.scientists4pr.org/
Anyone who believes exponential growth can go on forever in a finite world
is either a madman or an economist.--Kenneth Boulding ---- Excerpts from
Guardian article: Monopoly money gives you credit in the land of the bourgeois
poor http://www.guardian.co.uk/Archive/ Article/0,4273,4243942,00.html
The growth of barter clubs, which started in 1995 and now involve about
a million Argentines, is a reflection of the country's deep economic crisis.
[...] Now, the Menelle family wants to go back, "for these three reasons:
no money, no money and no money," he said, standing in the visa queue outside
the Italian consulate. [...] Argentina's large middle class has been responsible
for the unprecedented growth in barter clubs. The idea of creating community
credits to trade products or services first emerged in Canada in the early
1980s but has only caught on as a mass phenomenon in Argentina. **** More
specifically, the first LETSystem in the Comox Valley in 1982. www.gmlets.u-net.com/
ernie ----